Rogue AAPL trader sentenced to 30 months in prison

updated 08:30 pm EST, Tue November 19, 2013

by MacNN Staff

David Miller brought down his employer, still faces civil lawsuit

A former stock trader who bankrupted his former employer in a bet on Apple stock that went bad, and who pleaded guilty to wire fraud and conspiracy in a plea deal, has been sentenced to prison for his crimes - for one-tenth of the maximum time he faced. David Miller, 41, will serve 30 months in prison for his scheme to buy more than 1,000 times the amount of AAPL a customer ordered, on the same day that Apple was to announce its third-quarter revenues in 2012. He planned to sell the excess stock when the price rose, and pocket the difference for himself.

However, as often happens when Apple announces strong results, the stock actually went down instead. Miller had attempted to create a "hedge fund" parachute in case his bet didn't materialize, allowing him to easily jump ship from Rochdale Securities in Stamford, Connecticut to another unidentified firm. Miller told a rival brokerage that he was leaving Rochdale, and might come to work for them.

He asked the rival brokerage to sell a half-million shares of AAPL just before the earnings were announced, which they did - earning a healthy profit that would have smoothed the way for Miller to jump ship if his bet was wrong. Had AAPL gone up and the rival broker lost money, Miller would have kept his job - and profits - at Rochdale.

The incident began when Miller improperly bought nearly $1 billion in AAPL rather than the $1 million requested by a client, and planned to blame a typographical error if he had been detected. He expected Apple's stock price to rise after the quarterly announcements, and then would sell the excess stock, keeping the expected profit. When AAPL dipped in price after the earnings results due to a small drop in iPad growth, the resulting shortfall of $5.3 million was so severe that Rochdale found itself undercapitalized, unable to make speculative purchases or execute customer order.

The company was soon unable to continue operations and laid off its staff in November, withdrawing its registrations with the SEC and the state of Connecticut in late February 2013 after settling customer accounts. Rochdale was not a party in the case and was never accused of wrongdoing, according to Reuters.

Miller was arrested by the FBI shortly afterwards on fraud charges. His lawyer characterized the incident as "out of character for a kind and generous family man who has lived an otherwise law-abiding and good life." Attorney Kenneth Murphy told the court back in April that Miller "deeply regrets what he has done and the harm it has caused to other people, including the former principals and employees at Rochdale."

Miller is still facing a civil lawsuit over the incident, brought by the Securities and Exchange Commission. His attorney was not available for an updated comment.

TAGS

2 Comments

I remember when this happened. You'd think somebody making a billion-dollar illegal bet would have done his homework that AAPL almost *always* goes down at least a bit shortly after earnings (or flashy products) are announced, even if the results were good. Hype plays such a big role, in fact, I can only think of a couple of times AAPL has gone up shortly after Apple announced something.

Login Here

Please note that it takes a couple of minutes for new comments to be visible in this area.

&nbsp

Now AAPL Stock: 153.14 ( + 2.59 )

Cirrus creates Lightning-headphone dev kit

Apple supplier Cirrus Logic has introduced a MFi-compliant new development kit for companies interested in using Cirrus' chips to create Lightning-based headphones, which -- regardless of whether rumors about Apple dropping the analog headphone jack in its iPhone this fall -- can offer advantages to music-loving iOS device users. The kit mentions some of the advantages of an all-digital headset or headphone connector, including higher-bitrate support, a more customizable experience, and support for power and data transfer into headphone hardware. Several companies already make Lightning headphones, and Apple has supported the concept since June 2014. http://bit.ly/29giiZj

Share

Developer453d

Apple Store app offers Procreate Pocket

The Apple Store app for iPhone, which periodically rewards users with free app gifts, is now offering the iPhone "Pocket" version of drawing app Procreate for those who have the free Apple Store app until July 28. Users who have redeemed the offer by navigating to the "Stores" tab of the app and swiping past the "iPhone Upgrade Program" banner to the "Procreate" banner have noted that only the limited Pocket (iPhone) version of the app is available free, even if the Apple Store app is installed and the offer redeemed on an iPad. The Pocket version currently sells for $3 on the iOS App Store. [32.4MB]

Share

453d

Porsche adds CarPlay to 2017 Panamera

Porsche has added a fifth model of vehicle to its CarPlay-supported lineup, announcing that the 2017 Panamera -- which will arrive in the US in January -- will include Apple's infotainment technology, and be seen on a giant 12.3-inch touchscreen as part of an all-new Porsche Communication Management system. The luxury sedan starts at $99,900 for the 4S model, and scales up to the Panamera Turbo, which sells for $146,900. Other vehicles that currently support CarPlay include the 2016 911 and the 2017 models of Macan, 718 Boxster, and 718 Cayman. The company did not mention support for Google's corresponding Android Auto in its announcement. http://bit.ly/295ZQ94

Share

Industry453d

Apple employees testing wheelchair features

New features included in the forthcoming watchOS 3 are being tested by Apple retail store employees, including a new activity-tracking feature that has been designed with wheelchair users in mind. The move is slightly unusual in that, while retail employees have previously been used to test pre-release versions of OS X and iOS, this marks the first time they've been included in the otherwise developer-only watchOS betas. The company is said to have gone to great lengths to modify the activity tracker for wheelchair users, including changing the "time to stand" notification to "time to roll" and including two wheelchair-centric workout apps. http://bit.ly/2955JDa

Share

Troubleshooting454d

SanDisk reveals two 256GB microSDXC cards

SanDisk has introduced two 256GB microSDXC cards. Arriving in August for $150, the Ultra microSDXC UHS-I Premium Edition card offers transfer speeds of up to 95MB/s for reading data. The Extreme microSDXC UHS-I card can read at a fast 100MB/s and write at up to 90MB/s, and will be shipping sometime in the fourth quarter for $200. http://bit.ly/294Q1If

Share

Upgrades/storage454d

Apple's third-quarter results due July 26

Apple has advised it will be issuing its third-quarter results on July 26, with a conference call to answer investor and analyst queries about the earnings set to take place later that day. The stream of the call will go live at 2pm PT (5pm ET) via Apple's investor site, with the results themselves expected to be released roughly 30 minutes before the call commences. Apple's guidance for the quarter put revenue at between $41 billion and $43 billion. http://apple.co/1oi1Pbm

Share

Investor455d

Twitter stickers slowly roll out to users

Twitter has introduced "stickers," allowing users to add extra graphical elements to their photos before uploading them to the micro-blogging service. A library of hundreds of accessories, props, and emoji will be available to use as stickers, which can be resized, rotated, and placed anywhere on the photograph. Images with stickers will also become searchable with viewers able to select a sticker to see how others use the same graphic in their own posts. Twitter advises stickers will be rolling out to users over the next few weeks, and will work on both the mobile apps and through the browser. http://bit.ly/29bbwUE